Michigan Department of Treasury Issues Bulletin on Taxation of Digital Goods

• The Michigan Department of Treasury has issued a bulletin addressing the taxation of computer software and digital products.
• The bulletin replaces previous guidance and includes updated definitions and guidance on sales and use tax.
• Prewritten computer software is now included in the definition of tangible personal property for tax purposes.
• Digital goods that do not fall under the definition of prewritten computer software are not taxable.
• Examples of taxable prewritten computer software include applications, video games, and other digital products that require a fee or charge.
• Non-fungible tokens (NFTs) are considered digital goods and are classified as “digital code” by Michigan.
• The bulletin is retroactive and taxpayers can rely on it for direction until it is revoked or changed by legislation or judicial precedent.
• It is important to review the state’s definitions to determine the proper sales and use tax treatment for software and digital goods.

Source: salestaxinstitute.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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